Half Yearly Report

Notes to the interim report and financial information

1. Basis of preparation

Statement of compliance

The financial information in this interim report has been prepared in accordance with the disclosure requirements of the Alternative Investment Market (“AIM”) Rules and the recognition and measurements of International Financial Reporting Standards (IFRS), as adopted by the European Union (EU).

The interim report does not include all of the information required for full annual financial statements.

The accounting policies adopted by the Group in the preparation of its 2015 interim report are those which the Group currently expects to adopt in its annual financial statements for the year ending 30 November 2015 and are consistent with those disclosed in the annual financial statements for the year ended 30 November 2014.

The financial information for the period ended 31 May 2015 does not constitute the Company’s statutory accounts.  The statutory accounts for the year ended 30 November 2014 have been delivered to the Registrar of Companies in England and Wales.  The auditor has reported on those accounts.  Its report was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under Section 498(2) or 498(3) of the Companies Act 2006.  The financial information for the half year ended 31 May 2015 and 31 May 2014 is unaudited.

The AIM Rules for Companies do not require IAS 34 “Interim Financial Reporting” to be applied; therefore it has not been used in the preparation of this interim report.

Going concern

The financial statements of the Group have been prepared on a going concern basis.  In making this assessment, the Directors have prepared detailed financial forecasts for the period to November 2017 which consider the funding and capital position of the Group.  Those forecasts make assumptions in respect of future trading conditions, notably the economic environment and its impact on the Group’s revenues and costs.  In addition to this, the nature of the Group’s business is such that there can be considerable variation in the timing of cash inflows.  The forecasts take into account foreseeable downside risks, based on the information that is available to the Directors at the time of the approval of these financial statements.

Certain activities of the Group are regulated by the Financial Conduct Authority (FCA) which is the statutory regulator for financial services business in the UK and has responsibility for policy, monitoring and discipline for the financial services industry.  The FCA requires the Group’s capital resources to be adequate; that is sufficient in terms of quantity, quality and availability, in relation to its regulated activities.  The Directors monitor the Group’s regulatory capital resources on a daily basis and they have developed appropriate scenario tests and corrective management plans which they are prepared to implement to address any potential deficit as required.  These actions may include cost reductions, regulatory capital optimisation programmes or further capital raising.  The Directors consider that, taking account of foreseeable downside risks, regulatory capital requirements will continue to be met.

The Directors have renewed the Group’s banking facilities, confirming that these will be available until 28 February 2016.

2. Segmental reporting

The Group has two operating segments. 

The Private Wealth Management division offers investment management advice and services to individuals and contains the Group’s Wealth Planning business, giving advice on and acting as intermediary for a range of financial products.  The Corporate Broking division provides corporate finance and corporate broking advice and services to companies and acts as Nominated Adviser to clients listed on AIM.  It also contains the Group’s Institutional Sales and Research business, which carries out stockbroking activities on behalf of companies as well as conducting research into markets of interest to its clients.

All divisions are located in the UK or the Isle of Man.  Each reportable segment has a segment manager who is directly accountable to and maintains regular contact with the CEO. 

No customer represents more than ten percent of the Group’s revenue.

2. Segmental reporting continued

The following tables represent revenue and profit information for the Group’s business segments:

Half year ended 31 May 2015

Half year ended 31 May 2014

Year ended 30 November 2014 (audited)

3. Investments

Fair value, in the case of quoted investments, represents the bid price at the reporting date.  In the case of unquoted investments, the fair value is estimated by reference to recent arm’s length transactions.  The fair value of warrants is estimated using established valuation models.

4. Cash, cash equivalents and bank overdrafts

For the purposes of the statement of cash flows, cash and cash equivalents comprise cash in hand and deposits with banks and financial institutions with a maturity of up to three months.

Cash and cash equivalents represent the Group’s and the Company’s money and money held for settlement of outstanding transactions. 

Money held on behalf of clients is not included in the statement of financial position.  Client money at 31 May 2015 was £130.8m (31 May 2014: £101.6m; 30 November 2014: £107.2m).

5. Share capital

The total number of authorised ordinary shares is 34.5 million shares of 5p each (31 May 2014 and 30 November 2014: 34.5 million).  The total number of issued ordinary shares is 24.4 million shares of 5p each (31 May 2014: 23.8 million and 30 November 2014: 23.9 million).

6. Earnings per share

Basic earnings per share (EPS) is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Company and held as treasury shares.

Diluted EPS is the basic EPS, adjusted for the effect of conversion into fully paid shares of the weighted average number of all dilutive employee share options outstanding during the period.  34,838 options over shares are excluded from the EPS calculation.  At 31 May 2014: nil and 30 November 2014: nil options were excluded from the EPS calculation as they were anti-dilutive.  Anti-dilutive options represent options issued where the exercise price is greater than the average market price for the period.

6. Earnings per share continued

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:

7. Dividends

A final dividend of 2.0p per share, in respect of the year ended 30 November 2014, was approved by shareholders at the Annual General Meeting held on 26 March 2015.  This was subsequently paid on 10 April 2015.  No interim dividend has been paid or proposed in respect of the current financial year (2014: nil).

8. Contingent liabilities

In April 2014, the FCA instigated an investigation into WH Ireland Limited, the principal operating subsidiary of
WH Ireland Group plc, in respect of its control procedures required by Principle 3 of the FCA Rules of Business.  The investigation is in relation to the period between 1st January 2013 until 19th June 2013.

The Directors continue to cooperate fully with the FCA and are in ongoing dialogue in the hope of seeking clarity and timely resolution of the matter.  There is insufficient information at the date of these financial statements to allow the Board to make a reliable estimate of the effect on the Group’s financial position.  The Directors have therefore made no provision in these financial statements in respect of this matter.

9. Availability of Interim Report

Copies of this Report and the Company’s shareholder presentation can be downloaded from the Company’s website at www.wh-ireland.co.uk.